Consider the utility function u x y 2ln x ln y Initially the prices are p x 2 unit and p y 1 unit The consumer has an income of
Consider the utility function u x y ln x ln y Initially the prices are p x unit and p y unit
Consider the utility function u x y ln x ln y Initially the prices are p
x y ln x ln y Initially the prices are p x unit and p y unit The consumer has an income of
Consider the utility function u x y ln x ln y Initially the prices
are p x unit and p y unit The consumer has an income of
Consider the utility function u x y ln x ln y
Consider the utility function u
Consider the utility function u ( x,y ) = 2ln x + ln y . Initially, the prices are p x = \$2/unit and p y = \$1/unit. The consumer has an income of...

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Paper instructions

Consider the utility function u(x,y) = 2lnx + lny. Initially, the prices are px = \$2/unit and py = \$1/unit. The consumer has an income of \$24. Illustrate your answers with graphs. (a) Derive the consumer's optimal consumption bundle. (b) Now suppose the price of good x increases to = \$3/unit. What is the new optimal consumption bundle? (c) Calculate the substitution effect and the income effect.Illustrate it on a graph. (d) Calculate the compensating variation and equivalent variation of the price change.